The cost of food

In August of this year, Ipsos Mackay released a report entitled We Are What We Eat. The report is based on a series of 16 group discussions with Australian men and women ranging in age from early 20s to mid-70s, conducted in Sydney, Melbourne, Perth, Wollongong, Geelong and Bunbury in July 2009.

One of the many findings from that report was that Australian consumers believed that they pay more than they used to for food and more than they should.

The not-so-humble lamb chop seemed to be a litmus test for how much food prices have shot up. Older consumers in particular recalled that the lamb chop used to be a cheap cut for family dinners whereas now little French-cut lamb chops are as expensive as anything, more like dinner party fare.

In the context of this report, who did consumers blame for these increasing costs? Well, the lack of supermarket competition for one.

The following story shows consumer perception may have some justification with new OECD figures showing Australia has the fastest rising food prices of any major developed nation.

http://www.news.com.au/business/money/story/0,28323,26323275-5017313,00.html

As this story shows, Associate Professor Frank Zumbo, an academic at UNSW in business law and taxation, agrees with consumer sentiment and blames the lack of competition in the supermarket sector.

Perhaps more concerning than rising food prices is the growing consumer perception that it is cheaper to eat fast and unhealthy food than it is to eat healthy food. More than taste and convenience, it now seems economically rational to opt for bad pizza and burgers over home cooked, healthy dinners.